This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies. Read our privacy policy to learn more.

Disclosures will apply to derivatives, repurchase agreements, and
reverse purchase agreements, as well as securities borrowing and
securities lending transactions that are offset in accordance with
FASB criteria or subject to a master netting arrangement or similar agreement.

Last December, FASB issued ASU
No. 2011-11, Balance Sheet (Topic 210): Disclosures About
Offsetting Assets and Liabilities. The standard was the result
of a joint FASB project with the International Accounting Standards
Board and was created to improve transparency and comparability
between U.S. GAAP and IFRS.

The standard requires enhanced disclosures about financial
instruments and derivative instruments that are either offset on the
statement of financial position or subject to an enforceable master
netting arrangement or a similar agreement.

After the standard was finalized, companies realized that many
contracts have standard commercial provisions that would equate to a
master netting arrangement. As a result, FASB decided to narrow the
definition of financial instruments in ASU No. 2011-11 to prevent
unnecessary compliance costs for situations where disclosures would
provide minimal value to users.

“The goal is to reduce unintended costs while providing investors
and other users with the information they need,” FASB Technical
Director Susan Cosper said in a statement.

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.